Turquoise, one of a new breed of alternative trading systems that potentially threatens the future of Europe's exchanges, registered record trading volumes last week as it prepares itself for a sale by the end of the year. The development promoted claims by analysts that the system's bank owners could be trading heavy volumes to increase the value of a sale.

The London-based system performed a record 11.05% of FTSE 100 trades on August 11, 7% of Dax trades on August 12 and 8.06% of Cac40 trades on August 13, according to a spokeswoman. It also hit a high in Dutch stocks on Monday, and its dark pool traded a record €56.8m ($80.8m) on August 13, she said.

The figures emerged after Turquoise earlier this week appointed UBS to explore a potential sale to rivals including the London Stock Exchange, Deutsche Börse and alternative venue Chi-X Global, according to a source close to the matter.

The system's nine shareholders, which have bankrolled the system for the past three years, are thought to be questioning whether they are the right backers to take the platform forward.

Earlier this year, Turquoise suffered a precipitous fall in its European market share after agreements with its nine shareholders to send trades to the system expired. The system’s share of all European equity trades fell to 2.1% in April from 5.1% in February, according to Thomson Reuters. However, volumes have since staged a steady recovery, with the system’s European market share rising to 4.5% so far this month.

Mamoun Tazi, an analyst with MF Global, said: “Turquoise’s members may be trying to get a better price by sending more orders to the system. If you want to sell something, you try to make it look good.”

Sarah Spikes, an analyst at Arden Partners, said: "It seems theoretically plausible the shareholders have increased trading ahead of a sale but it is not clear to prospective buyers whether the banks will continue providing this liquidity to Turquoise after they sell it."

But Yann L'Huillier, chief information officer at Turquoise, denied this claim, saying the increase in volumes was down to the system’s success in attracting new members.

Related

He said: “We have signed on around 15 new members since March, and these participants have ramped up their activity in recent weeks.

"Second, there is a network effect from this new activity, as existing members trade more, which in turn attracts new members.”

A source at one Turquoise shareholder added: “How people use Turquoise is down to their own internal parameters and their technology and we have all been making efforts to improve our technology, which has had a positive effect on Turquoise in recent weeks.”